Nippon Steel, Japan’s largest integrated steelmaker, has decided to lift its domestic plate prices for spot sales and for construction projects for September sale (October deliveries) by Yen 5,000/t ($47/t), a Nippon Steel official confirmed on August 31. The increase, the company’s first for plates for 15 months, is to pass along higher input costs, the official said.
Nippon Steel does not disclose its list prices, but as of August 31, the price of SS400 grade 19mm thick, 1,524 x 3,048 mm cut heavy plate in Tokyo was at Yen 82,000-84,000/t ($777-796/t), down Yen 1,000/t from mid-August, sources confirmed.
The increase is Nippon Steel’s first for commodity grade plates since May 2019 when it lifted prices by a minimum of Yen 5,000/t for all customers, including for spot sales, long-term contracts and for export, claiming higher costs.
“Most customers had agreed to accept last year’s increase, but input costs such raw materials, auxiliary materials, delivery fees and maintenance costs are rising further,” the company official explained. “We really need to pass those rises onto product prices, for us to keep supplying to customers stably.”
Next month’s rise is limited for spot and construction projects because plate demand for construction is the only sector showing some improvement in demand, a Tokyo-based trader explained, adding that about 60-70% of plate spot sales are construction-related.
“We can understand why Nippon Steel is trying to win higher prices from the sector that’s performing better, but they’ll have to lift prices for other sectors such shipbuilding and machinery manufacturing, also for export” he predicted.
A second trader agreed but added that demand from the construction sector is better but still not stable or strong. “It might take time to have customers to agree to increased prices,” he warned.
The second trader also noted that overall plate demand has been sluggish, and even though it might be better in the second half of this fiscal year (October 2020-March 2021), no large increase was expected. “Producers will continue trimming plate output to keep market conditions tighter – that’s the only way to force prices to rise,” he said.
Japan produced 652,700 tonnes of plate in July, lower by 33.5% on year and down 4.2% on month. During April-July, the total reached 2.74 million tonnes, down 11.1% on year, according to the latest data by the Japan Iron & Steel Federation, as reported.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
Leave a Reply